Labor Markup Calculator

1. Enter the worker's base hourly wage.
2. Add labor burden — payroll taxes, insurance and benefits as a percent of wages — to get the loaded cost.
3. Enter the markup you apply to loaded cost and the job hours to get a bill rate and labor price.

Quick answers

How do I mark up labor?

Bill rate = wage × (1 + burden) × (1 + markup). A $30 wage with 30% burden and 25% markup bills at $30 × 1.30 × 1.25 = $48.75/hour.

Is labor markup the same as margin?

No. A 25% markup on cost is a 20% margin on price. Use the Markup vs Margin Calculator to convert.

Edge cases and limits

• Marking up raw wages without burden underprices every hour.
• For a full job price including materials, overhead and profit, use the Job Bid Calculator.

Burden is added to the wage to get the true cost of an hour. Markup is then applied to that loaded cost. Margin is the resulting profit divided by the bill rate, so it is always smaller than the markup.

• Loaded cost = wage × (1 + burden %)
• Bill rate = loaded cost × (1 + markup %)
• Profit per hour = bill rate − loaded cost
• Gross margin = profit per hour ÷ bill rate
• Markup needed for a target margin = margin ÷ (1 − margin)

A technician earns $30 an hour, burden adds 30%, and the shop marks labor up 50% on loaded cost.

1. 1Loaded cost = $30 × 1.30 = $39.00 an hour.
2. 2Bill rate = $39.00 × 1.50 = $58.50 an hour.
3. 3Profit = $58.50 − $39.00 = $19.50 an hour.
4. 4Margin = $19.50 ÷ $58.50 = 33.33% — well below the 50% markup. The bill rate is 1.95× the base wage.

What is the difference between labor markup and labor burden?

Burden is a cost: the taxes, insurance and benefits you pay on top of wages. Markup is pricing: what you add on top of that total cost to cover overhead and profit. Burden raises your cost; markup raises your price.

What is the difference between markup and margin?

Markup is profit divided by cost; margin is profit divided by price. A 50% markup is a 33.3% margin, and a 100% markup is a 50% margin.

Should I mark up the wage or the loaded cost?

The loaded cost. If you mark up the bare wage, the burden eats into what you thought was profit.

What markup do I need for a 40% margin?

Markup = margin ÷ (1 − margin) = 0.40 ÷ 0.60 = 66.7% on loaded cost.

What is a labor multiplier?

The bill rate divided by the base wage. In the example, $58.50 ÷ $30 = 1.95. It is a quick way to sanity-check rates across employees.